Amazon

Amazon's cloud business grew 39% to 46 billion dollars this quarter, its fastest growth in nearly five years. That puts it on pace for 184 billion dollars a year, and cloud profit jumped to 17.8 billion dollars from 11.4 billion a year ago. Amazon expects cloud growth to top 40% in both 2027 and 2028 as companies race to run AI on its computers.

Amazon kept nearly 14 cents of every sales dollar as profit this quarter, the best rate in its history. Profit from running its businesses jumped to 28.1 billion dollars from 17.4 billion a year ago, and the online store helped too, with North America profit nearly doubling to 8.7 billion dollars. For the holiday quarter, Amazon expects profit of 28.5 to 33.5 billion dollars, up from 25 billion last year.

Amazon expects to spend about 220 billion dollars this year on data centers and equipment, mostly for AI. Over the past 12 months, the cash left over after those bills swung from a positive 14.8 billion dollars to a negative 42.4 billion. If AI demand cools before those data centers pay off, the spending becomes a very expensive mistake.

Total sales grew just 12%, with the online store up only 6% in North America and 5% overseas. Much of that is timing, since Prime Day moved earlier this year, and Amazon says growth would have been closer to 16% without the shift. Advertising also cooled to 12% growth, though Amazon expects it to bounce back to the high teens next quarter.